Starbucks announces new diversity targets, links executive compensation to hitting goals

Julia La Roche · Former Correspondent

Updated Wed, Oct 14, 2020, 8:08 AM 4 min read

Coffee behemoth Starbucks (SBUX) is taking its diversity and inclusion efforts to the next level by rolling out a new mentorship program for its partners, setting target goals for diversity across the company's ranks, publicly sharing its progress, and linking executive compensation to hitting those goals.

Starting in fiscal 2021, Starbucks will launch a mentorship program to connect its Black, Indigenous and People of Color employees (BIPOC), known internally as “partners,” to senior leaders within the company. The company's senior vice president and above leaders will work with BIPOC partners to advance in their careers.

"While this reads mentorship, it's going to feel like sponsorship, because we're going to have to partner with our senior [vice presidents], who are the leaders of these individuals in the company, and have almost a three-way conversation," Starbucks COO Roz Brewer told Yahoo Finance in a video call.

Brewer, one of the top-ranking Black women in corporate America, joined Starbucks in March 2017 from Walmart-owned membership warehouse Sam's Club, where she served as its CEO and president.

"To be honest with you, that's something I've always dreamed of when I was coming through the ranks — is that I had a manager, maybe that manager got it maybe they didn't, and then I would have a mentor or someone else who maybe understood me a little bit better because either they looked like me or they had worked with someone like me, but I could never really bring them together. So, I'm hoping that's the kind of conversation we can have is a three-way partnership," Brewer added.

Starbucks Chief Operations Officer and Group President Rosalind "Roz" Brewer speaks at the Annual Meeting of Shareholders in Seattle, Washington on March 20, 2019. (Photo by Jason Redmond / AFP) (Photo credit should read JASON REDMOND/AFP via Getty Images)

Starbucks also set a target of achieving BIPOC representation of "at least 30%" at all corporate levels and "at least 40%" across its retail and manufacturing jobs by 2025.

In a letter on Wednesday, CEO Kevin Johnson said the company will hold itself accountable “at the highest levels of the organization, connecting the building of inclusive and diverse teams to our executive compensation program, effective immediately.”

Going forward, Starbucks' Inclusion and Diversity team, which reports directly to Brewer, will provide analytics tools for leaders to view diversity and inclusion goals in "different slices and dices."

"The old adage is what gets monitored and measured gets results, but really, what we want to do is provide the transparency so we can hold ourselves accountable. You can't look at these numbers and not react," Brewer added.

Starbucks will also publicly share its progress by providing its EEO-1 data going back three years to "make it easy for people to trend along with us," Brewer added.

"This kind of data comes available to companies every year, but in the plight of everything that's happening, we decided, how do we want to address what we are learning about ourselves? And, you might recall that we've been on this journey since our incident in Philadelphia," Brewer said.

In May 2018, Starbucks closed all of its 8,000-plus U.S. stores for four hours so its employees could participate in company-wide racial-bias training following the arrest of two Black men in a Philadelphia store, an event the company's leadership apologized for and denounced as "reprehensible."

The company is now embedding anti-bias content into its hiring practices, and partners at the vice president level and higher must complete a two-hour anti-bias training and racial bias courses, Johnson wrote in the letter. The CEO added that Starbucks will launch an Inclusion and Diversity Executive Council “to provide internal governance to integrate inclusion and diversity throughout the organization.” The company will also join the Board Diversity Action Alliance to promote diversity on corporate boards.

"We've been training and developing all along, but at this moment, should we be more transparent about the work we're doing and more intentional about the work we're doing, and really raise the accountability about it," Brewer said.

While many companies are coming out with initiatives and making large donations to promote racial equity and inclusion, Brewer recognizes the need to do more internally.

"The reality of it all is that we've got to take care of ourselves and be committed to our partner base. We want to make sure we got our own house in order before we take on everything else," Brewer said, adding, "We want to lead by example and set the tone, which is why you'll see us get a lot more intentional about what we want to do in this space."

Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.